As the Government extends its mortgage guarantee scheme, Dan Hyde
argues for a more sustainable, low-cost prop than this dangerous stimulus
for the housing market

It is time we had a Budget for savers. Five years of record low interest rates, broken election promises and a string of desperate government schemes to help borrowers have inflicted pain on the prudent.

A cursory glance at the opposite page detailing today's best cash Isa rates, which pay merely half as much as in March 2012, demonstrates the scant attention the Government has paid to savers, many of whom face sizeable income cuts this spring.

Not once since he assumed office has David Cameron mentioned abolishing tax on savings for basic-rate taxpayers – the so far empty promise he made in 2009 to woo votes ahead of the last general election – or any other meaningful succour.

Enough is enough. The Budget delivered by the Chancellor this Wednesday must address these concerns, which are shared by Britain's biggest banks and building societies, backbench MPs, stockbrokers, financial advisers and consumer groups, all of whom have thrown their support behind the Telegraph's campaign to reinvigorate a savings culture.

Our call to action goes much deeper than brief respite for those who have worked hard to create wealth for their families and retirements.

George Osborne, who has held the keys to the Exchequer for four years, is acutely aware of the crisis. Rocketing house prices and a squeeze on bank lending are lifting ownership, once perceived a right rather than a luxury, out of reach for the under-40s.

To address this, the Government has tried to boost bank lending, launching Help to Buy to underwrite loans to first-time buyers. The result, though, has been to add a layer of froth to property prices in London and the South while, I am informed, making it only marginally easier for first-time buyers to obtain finance.

There are also fears that the lending buzz – Help to Buy is expected to be extended to 2020 in the Budget on Wednesday – is leading a section of younger buyers to take on excessive debts. The chief executive of Nationwide, Britain's biggest building society, has cautioned that borrowers lured by today's lower rates are unprepared for "normal" economic conditions.

Regardless of whether these borrowers struggle in the future, lenders will be forced from April to introduce tougher tests of affordability, delving into customers' spending habits and ascertaining their ability to service loans.

Hence problems may stem from too much credit being given to some people, or too little being available to others.

If policymakers fail to make home ownership possible for an entire generation, the Tories could lose the support both of today's younger generations and their parents.

The solution is to encourage home buyers to save up larger deposits. Increasing the number of homes bought with substantial equity would provide sustainable, long-term support at the foot of the housing ladder, as opposed to the dangerous, one-off stimulus of loan schemes.

That is why it is a political imperative for Mr Osborne to resuscitate the savings habit, which is disappearing in Britain, by giving would-be home buyers the means to build ample deposits.

The Treasury might argue its cupboards are too bare to remove tax on savings. But it can help in other, less costly, ways.

Industry estimates suggest 1.5million people are saving for their first home by using a cash Isa. This is the place to start. One part of the Telegraph's Fix Britain's Creaking Isas campaign calls on the Government to equalise the cash and shares Isas allowances. Currently, just £5,760 – half of the total £11,520 allowance – can go into cash. By contrast, investors can put the full amount into shares.

This aberration, a legacy of an Isa system fused from Mrs Thatcher's Tessa and Pep regimes, is an impediment to first-time buyers. Most of those saving for a deposit cannot afford to gamble on the stock market; four in five use only cash Isas. It would cost the Treasury £51m to equalise the limits next year, estimates suggest. That would be a drop in the ocean compared with other government spending, but would yield enormous social – and political – gain.